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Specialist property finance A product guide

Transcript of property finance - storage.googleapis.com · 4 octopus-realestate.com 0800 294 6850 5 Residential...

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Specialist property financeA product guide

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Created by Made x Made Iconsfrom the Noun Project

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WelcomeWelcome to our product guide, with detailed information on our residential, commercial and development products.

Why us?

We’re customer obsessed We’ve spent ten years building a business known for putting its customers first. Our customers come back to us time and again, because they trust us to put together the right deal, at the right time.

We relish the unconventional There’s always a better way to do business. We take pride in achieving what others think is impossible, and our unique approach has helped us win numerous property lending awards.

We’re not your average lender We provide funding to property investors and developers at every stage of the property life cycle. You won’t get that type of commitment anywhere else. And we’re not a bank, so don’t think like one.

We’re part of something bigger We’re proud to be part of Octopus, a group of companies that invests in the people, ideas and industries that will help to change the world.

Your business development managersLocal support, national coverageOur business development team are always on hand to help, and by working with us, you’ll also have direct access to the rest of our teams.

Borrower profile Asset profile

• Houses of multiple occupation (HMOs)

• Commercial

• Land with planning

• Hotels

• Student accommodation

• Multi-unit freehold blocks

• Holiday lets

• High-rise buildings

• Ex-local

• Standard residential

Property developersTypically SME firms looking to build 5 to 200 units.

Property companiesWide variety including UK and offshore entities, limited companies and special purpose vehicles.

IndividualsBoth domestic and international investors in UK real estate including foreign nationals, first time buyers and expats.

Contents

Product Max LTV Loan term Rates Page

Residential

Bridging70% unregulated 65% regulated

1-24 months From 0.70% p.m. p4

Bridge-to-let 70% 24 months From 7.99% p.a. p5

Refurbishment 75% 9-21 months 0.80% p.m. p6

Development

Development light 75% day one 12–24 months From 7.00% p.a. p7

Senior development 70% net day one 12–30 months From 6.25% p.a. p8

Stretched senior 70% net day one 12–30 months 8.50% p.a. p9

Development exit 70% 24 months From 7.99% p.a. p10

Commercial

Bridging 70% 1–24 months From 0.75% p.m. p11

Auction 50% net day one 6 months 0.83% p.m. p12

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Residential

BridgingYou must be an FCA authorised adviser (or have someone who is) to provide advice about whether this is the right product for your client. Your client’s home or property may be at risk if they do not keep up repayments on their mortgage.Regulated Bridging has a maximum LTV 65%.

Key features

Min property value £150k

LTV Up to 50% 50.10%–55% 55.10%–60% 60.10%–65% 65.10% - 70%

Rate 0.70% p.m. 0.75% p.m. 0.80% p.m. 0.85% p.m. 0.90% p.m.

Term 1-24 months

Arrangement fee 2%

Early repayment charge None

We can help

• Foreign nationals, expats, first time buyers and landlords, adverse considered, rental shortfalls• Auction purchases, semi-commercial, HMOs

Key facts

No exit fees No ERCsNo minimum

income requirements

Interest can be serviced, or we can retain it

Maximum term 24 months

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Bridge-to-letWhether your client is trying to improve a refinancing arrangement or retain a property on longer-term finance once a bridging term has ended, our bridge-to-let product is designed to give them the flexibility and breathing space they need.

Key features

Min loan size £500k

Max loan size £10m

Max LTV 70%

RateNo deferred interest From 7.99% p.a.

Deferred interest From 5.99% p.a.

Term 24 months

Arrangement fee 2% on completion. 0.50% added to the loan after the ERC free period

ERC free period 0–12 months

Early repayment charge 1%

We can help

• Borrowers looking to exit development finance pending sale of the asset/units• Borrowers looking to capital raise in order to realise part of the profit within a scheme• Borrowers looking to retain the asset longer term, whilst maintaining the option to sell if needed

Key facts

Flexibility of a short-term bridge with the benefits of a long-term interest rate

Multiple exit options without the need to

switch facilities

Interest can be serviced, or we can retain it

Residential investment properties only

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RefurbishmentWe define a refurbishment as a property of sound structure requiring internal re-configuration or improvement works that are generally non-structural. Our refurbishment loans are managed by our asset manager for a one-off fixed fee of £995, regardless of the number of drawdowns. This saves the borrower excessive quantity surveyor fees, and keeps the process simple and in house. No hidden extras or creeping charges. Simple lending at its best.

Key features

Min loan size £200k

Max LTV 75%

Max LTC 90%

Max LTGDV 70%

Rate 0.80% p.m.

Term 9-21 months

Arrangement fee 2%

Exit fee 0%

We can help

• Borrowers converting a house into flats, including single storey structural works into flats

• Borrowers converting a commercial asset into residential

• A full internal rework of a house in need of more than a bit of TLC

Key facts

An exciting blend of gearing and pricing

No non-utilisation fees. It’s only fair you pay

for what you use

Interest is added to the loan monthly and

compounded

All refurbishment costs are funded in arrears, so your client will need to put the first amount in to start the works

Development lightSome lenders won’t provide loans on smaller development schemes. Not us. We can help with ‘light’ development projects ranging anywhere from heavy refurbishment to ground up multiple unit developments. These schemes do not always require the same level of monitoring as larger schemes, so we will consider light touch quantity surveyor monitoring.

We can help

• Residential and mixed used schemes including new build/ground up (two units and more), permitted development, change of use conversions and heavy refurbishments (including structural work).

Key facts

Light- touch quantity surveyor monitoring with easier and more commercially minded reporting.

This cuts down on the costs and makes the process smoother for the borrower

We’ll use an asset manager where

possible (conversions and refurbs only)

Dedicated underwriting

team

The interest will be rolled for the whole

duration of the project including sale period

Development

Limited time offerCheap funding for small

development schemes (from 7.00% p.a.)Min loan size £1m • Max loan size £3m • Max initial LTV 75%

Max LTGDV 65% • Term 12-24 months • Arrangement fee 1% • Exit fee 2%

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Senior developmentFrom small housing projects to large student accommodation developments, we support developments of all sizes, all across the UK. Since 2014, our development finance has supported the construction of over 3,000 new homes. We like to work with developers who have experience of delivering similar projects in the past so will ask about your client’s track record.

Key features

Min loan size £3m £3m

Max initial LTV (net) 70% 70%

Max LTGDV 60% 65%

Max LTC (net) 80% 80%

Term 12–30 months

Rates from 6.25% p.a. 7.00% p.a.

Arrangement fee 1%

Exit fee From 1% of the loan amount

We can help

• Developers looking for a first charge facility at 80% LTC

Key facts

Get an allowance for planning uplift (capped at 50%) enabling your client

to maximise the use of their cash

Flexibility on terms to meet your client’s needs

Interest is added to the loan monthly and compounded

Stretched seniorWe know from experience that sometimes developers need to secure a higher level of borrowing in order to proceed with a scheme. Which is why we were one of the first lenders to launch a senior product to market.

Key features

Min loan size £3m

Max initial LTV (net) 70%

LTGDV 70%

LTC 85%

Term Typically 12–30 months

Rate 8.50% p.a.

Arrangement Fee 0 – 1%

Exit fee c1.50% of the loan amount

We can help

• Developers looking for us to cover an enlarged lending facility at 85% LTC

Key facts

Maximising your client’s gearing. This can also include an uplift gained on planning, allowing

your client to make the most of their cash

Flexible on terms to meet your client’s needs

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Development exitOur development exit product was designed to meet the needs of clients who wanted to refinance completed development sites. It allows developers to improve their financing terms, giving them the time they need to make a sale, and the flexibility to release equity for future projects.

Key features

Min loan size £500k

Max loan size n/a

Max LTV 70%

RateNo deferred interest From 7.99% p.a.

Deferred interest From 5.49% p.a.

Term 24 months

Arrangement fee 2% on completion. 0.50% added to the loan after the ERC free period

ERC free period 0-12 months

Early repayment charge 1%

We can help

• Developers looking for time to sell completed schemes, release equity on day one and release equity from each unit saleKey facts

Flexibility of a short-term bridge with the benefits of a long-term interest rate

Multiple exit options without the need to switch facilities

Allows developers to capital raise on completed developments

Commercial

BridgingWorking across the commercial spectrum, our flexible bridging loans are structured around individual needs, to fund acquisitions, refinances and equity release.

Key features

Max LTV 70%

Rate From 0.75% p.m.

Term 1–24 months

Arrangement fee From 0.50%

Procuration fee From 1%

Early repayment charge None

We can help

• Commercial assets, from industrial wharfs to 5-star hotels

• Active management, turnaround and vacant assets

• Day one loans based on existing use value with further advances to reflect value enhancement through planning, refurbishment or reletting.

Key facts

Loans can be completed in as little as one week

Our experienced in-house lending team are all fully qualified Chartered Surveyors who have decades of investment experience and know how to structure loans

to achieve your client’s objectives

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AuctionBuying a property at auction can mean a scramble to get the necessary finance together in time. Our pre-approved loans, for assets purchased at Acuitus commercial property auctions, mean investors are guaranteed the finance they need, the moment the hammer falls.

Key features

Max LTV 50% (net day one)

Rate 0.83% p.m.

Term 6 months

Minimum property value £500k

Arrangement fee 1%

Amortisation Nil – interest only

Early repayment charge 0%

We can help

• Any property sold in the Acuitus auction room

• No valuation required

• Title indemnity insurance removes the requirement for lengthy and expensive legal due diligence

Key facts

Pre-approved finance Subject to KYC and Title Insurance

Potential to refinance onto longer term loan or development funding

Finance is subject only to title insurance, satisfactory credit and anti-money laundering checks.

Octopus Real Estate, part of Octopus Group, is a leading specialist real estate investor, with over £2 billion under management and a highly experienced team of over 110 professionals. We focus on the property lending and healthcare sectors.

The property lending team provides bespoke, customer focused financing solutions across the UK residential, commercial and development sectors. The team has lent more than £4 billion across over 3,000 loans, providing competitively priced financing throughout the UK and spanning the property investment lifecycle, with loans typically ranging from £100,000 to £50 million.

The healthcare team manages over £1 billion of investments, with a focus on care homes and retirement communities – sectors requiring significant investment given the UK’s ageing population. Octopus Real Estate also creates strategic partnerships with leading operators, to deliver exceptional healthcare facilities you’d choose for your loved ones.

About Octopus Real Estate

£8bnfunds under

management in the

Octopus Group

£4bnlent

3,500loans

Best Service from a Development Finance Provider

100property

professionals

Over

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Notes

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octopus-realestate.com

Octopus through and throughOctopus is a group of innovative, entrepreneurial businesses investing in the people, ideas and industries that will help to change the world. We are experts in financial services and energy, transforming these markets by offering our customers access to smart and simple solutions that do what we say they will.

Today we manage more than £8 billion on behalf of retail and institutional investors. Octopus Energy, Octopus Investments, Octopus Energy Investments, Octopus Real Estate, Octopus Ventures and Octopus Wealth are all part of Octopus Group.

octopusgroup.com.

Find out moreCall our Business Development Managers on 0800 294 6850 or visit octopus-realestate.com.

All data correct as at 31 July 2019.

For Professional Intermediaries Only.

Octopus Real Estate is the trading name of Octopus Property Lending Ltd (Reg No 7531926), Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Octopus Healthcare Adviser Ltd (Reg 09082100), Octopus Healthcare Development Ltd (Reg No 03788979) and Octopus Co-Lend Limited (Reg No 8913299), all registered in England & Wales at: 33 Holborn, London, EC1N 2HT, and Octopus Real Estate S.ar.l. (Reg No B189290) registered in Luxembourg at: Parc d’Activité Syrdall, 6 rue Gabriel Lippmann, L-5365 Munsbach, Luxembourg. Octopus Co-Lend Ltd, Octopus Healthcare Adviser Ltd and Octopus Property Lending Ltd are authorised and regulated by the Financial Conduct Authority.

How to apply

Get indicative terms by filling in a quick enquiry, we well aim to respond within 4 hours

For an agreement in principle submit a full enquiry. Our credit team will review

and aim to respond within 24 hours.

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